10:14 am, March 25, 2024
Car buyers applying for compensation as part of the ongoing vehicle finance scandal will be adopting a ‘you’ve got to be in it to win it’ approach to making a claim.
That is the opinion of one car dealer, who says he has already received an inquiry about a finance agreement dished out over recent years.
Alex Bradley, boss of Small Cars Direct in New Milton, has weighed into the debate surrounding car finance on the latest episode of the Car Dealer Podcast.
The dealer, who recently featured in our AI Car Dealership Project series, said that dealers were always told to be up front about commissions received as part of finance agreements.
However, he says that not one customer ever asked the question, as the FCA continues to investigate claims of ‘widespread wrongdoing’.
Speaking with podcast hosts James Baggott and Jon Reay, Bradley said: ‘I’ve only had one customer come back to me and ask for agreement details so they can follow it up with the lender – hopefully this podcast doesn’t initiate any more!
‘We’ve only had one customer and we did two or three deals with them. Their attitude is very much “you’ve got to be in it to win it” and I think this is going to be the mentality of a lot of people who are claiming – probably through Martin Lewis’s broadcasting more than anything else.
‘I’m pretty sure that in the paperwork that customers would have been issued with before going ahead with their agreements, there would have been something in there which would have prompted them to ask.
‘What I was told by the lenders was that if you’re asked for commission amounts that you are receiving as part of this deal, you must be telling them.
‘I’ll be honest, not one customer ever asked but of course if they did then we would have been forthcoming in telling them what exactly commission payments we received for brokering a deal.
‘I don’t know the grounds and the basis for the FCA are saying people may or may not have breached but it will be interesting to know when the outcome is released.’
Earlier this year, Martin Lewis fronted a special ITV show in which he focused on ‘hidden and unfair’ car finance commissions.
He set up a free reclaim tool and guide via his company MoneySavingExpert and customers have flocked to the service.
According to an article on the website, the tool received a whopping 1.08m inquiries in its first month of being live.
Lewis estimates that, as more than a quarter of complaints came from people with more than one agreement, compensation could already be close to £500,000.
The news comes just weeks after Lloyds Banking Group put aside £450m to deal with the Financial Conduct Authority’s (FCA) investigation into motor finance.
That was followed last week by Close Brothers conserving £400m as the FCA’s probe rumbles on.
Speaking on the latest episode of the Podcast, Car Dealer boss Baggott, said several questions remained unanswered.
He said: ‘It’s the not knowing isn’t it on this one? It’s the fact that nobody knows if the responsibility is going to lie with the lender or if dealers are going to have to stump up any cash as part of that.
‘I think this is the bit that has really got these stories so much interest around them. People are just worried. They’re really worried about how this one is going to play out.’
Dealers who are concerned about what the scandal could mean for them can view Lawgistics’ handy online guide. You can also watch Lewis’s full ITV show here.
The Car Dealer Podcast, sponsored by JATO, sees an industry guest join our hosts to discuss the motor trade’s biggest headlines of every week.
Among the other topics up for discussion in the latest episode were changes at Big Motoring World, the government’s latest apprenticeship scheme and Bentley’s u-turn on ICE vehicle production.
You can listen to all episodes of the Car Dealer Podcast on Spotify, or wherever you get your podcasts.
